Government offers resolution for Canterbury owners of on-sold properties

Government offers resolution for Canterbury owners of on-sold properties | Insurance Business

Government offers resolution for Canterbury owners of on-sold properties

The government has put forward a resolution for homeowners of on-sold properties in Canterbury.

This week, it announced that people with over-cap on-sold properties in Canterbury can now apply for an ex-gratia payment so they can start repairing their homes.

An “on-sold over-cap claim” is a claim on a property that has been sold since the earthquakes, and has subsequently had unscoped or missed damage identified and costed at more than the Earthquake Commission (EQC) cap, and the customer cannot recover the over-cap amount from their private insurer.

Sid Miller, chief executive at the EQC, is calling on Canterbury homeowners who think they may be eligible for the claim.

“Our staff will help homeowners through the process of determining whether their properties meet the eligibility criteria for this policy. This new policy will hopefully create certainty for homeowners and avoid the delays, stress and significant cost associated with court proceedings,” said Miller.

Read more: Insurer avoids earthquake claim due to 30-year building defect

Homeowners have 12 months to register their interest for the ex-gratia payment.

However, Miller warned that those who buy a house after August 15 will not be eligible for the payment.

“We need to reiterate that it is the responsibility of home buyers to do their due diligence and get a detailed building inspection before they buy a property, especially in an area that has been subject to a natural disaster,” he said.

“Unfortunately, many Canterbury buyers have used an EQC assessment to judge the state of a property. The EQC assessment is done to validate claims for earthquake damage, it is not a building report.”

Meanwhile, the Insurance Council of New Zealand (ICNZ) urged property buyers to do thorough diligence before buying a property. It also advised homeowners to put the ex-gratia payment toward properly fixing their homes.

“The fact the Government is making an ex-gratia payment to repair on-sold properties should not be seen as a green light to buy houses without due care. Insurers will always expect properties to be properly repaired before taking on the risks of insuring them,” said Tim Grafton, chief executive at ICNZ.

“We would also expect that all funds transferred to homeowners are applied to fixing the property up, so they can be fully insured.”